“When I was in Australia 15 months ago everyone thought that interest rates had bottomed and were going up. But now there is greater awareness among fund managers that it is going to stay lower for longer.”

Wood said the drop in gross domestic product means the Reserve Bank of Australia needs to keep cutting interest rates, but it is caught in a difficult position.

“The issue from Australia’s central bank standpoint is that it doesn’t want to cut interest rates because of the housing market which, from a value point of view, is overextended,” he said.

“You do have asset price rises driven by Chinese buying. But the bank is under pressure to cut rates, so I think it will have to come down to macroprudential controls and they are very political.”